1 min read.Updated: 17 Mar 2020, 07:51 PM ISTReuters
Indian banks, already burdened with some $140 billion in bad loans, worry their balance sheets could be hit further as businesses grind to a standstill
Mumbai: The coronavirus pandemic has sparked concerns about a fresh surge in bad loans at India's lenders, and the industry body representing the banks plans to appeal to regulators to provide some reprieve in bad-debt classification, two sources told Reuters on Tuesday.
"Discussions are on at this stage and we will make a representation to the regulator to see if we can get some relief regarding non-performing asset classification in the small and medium enterprises sector," one of the bankers said.
The appeal to the Reserve Bank of India (RBI) will be made via the Indian Banks' Association, the two senior bankers said, asking not to be named as the talks were still private.
India's economy expanded at its slowest pace in more than six years in the last three months of 2019 and analysts have predicted a further deceleration caused by the global COVID-19 outbreak.
Small businesses that were already reeling under stress due to the economic slowdown have been among the worst affected and banks have begun to see delays in loan repayments from them.
"Even though it is early we are beginning to see signs and as these are unprecedented times we want to ensure that we can provide some support," said the chief financial officer of a public sector bank.
The RBI had assured markets that it will take considered, calibrated actions to tackle the threat to the economy from the outbreak.
India has over 135 confirmed coronavirus cases, with several hundred people in isolation. Tourist sites and other places of mass gatherings such as cinemas and malls are being shut in major cities to curb the spread of the disease.
As fear grips the nation amid health concerns, Indian banks - already burdened with some $140 billion in bad loans - worry their balance sheets could be hit further as businesses grind to a standstill.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.